Kenya central bank holds key rate, sees inflation within target despite recent rise

By George Obulutsa

NAIROBI, ‌Oct 7 (Reuters) - ​Kenya's ​central bank maintained its benchmark lending rate on Wednesday, saying it saw inflation ‌staying within its target range in the ⁠short term despite it edging up in the past three ‌months.

• It was the ‌fourth policy meeting in a row that the Central Bank of Kenya has kept the ​rate unchanged at 8.75%.

• Nine of 11 economists polled by Reuters had predicted no ⁠change in the rate, while two had predicted an increase to ​9.0%.

• Kenya's inflation rose to 6.8% year-on-year in September from 6.6% a month earlier, ​moving closer to the upper ‌end of the government's preferred 2.5%-7.5% range.

• The central bank said in ⁠a statement: "Government interventions, including subsidies and the temporary reduction of VAT on fuel, continue to mitigate inflationary ⁠pressures."

• The central bank marginally revised upwards its 2026 economic ​growth forecast, to 5.0% from a 4.9% projection in August.

• It said the El Niño weather phenomenon was a ‌key risk to the growth outlook.

• The bank now forecasts a current ‌account deficit of 3.2% of gross domestic product ⁠in 2026, compared ‌with a deficit ​of 2.1% of GDP in 2025.

(Reporting by George Obulutsa;Editing by Alexander Winning and Toby ‌Chopra)

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